On the Library eBook-Publisher Problem
by Richard J. Naylor, Director, William K. Sanford Town Library
What to do about our ebook/publisher problems? Our general strategy seems to have been to try to explain why publishers are making a mistake and thereby solve the problem through dialog. Being generally kind and gentle creatures, we librarians are only acting according to our general nature.
Before looking at the three principles, how might we judge our options? To do this we must run the numbers to project probable effects. For example if each transaction costs X and we need to do Y transactions at full implementation what does it cost? Also, how much might we save with the method? Then when the numbers work we can try a pilot project.
First, how can we use the market? If we believe in the market system, we should let it work. In general the market should respond to a rational consumer who maximizes return. We should get the best deals and shun lesser ones. Given the choice between doing business with a publisher who charges three-times retail and retail we should buy retail. For Overdrive customers this means also that we need to give feedback to Overdrive as to which deals they negotiate are good and which are not -- by taking the good deals and leaving the poor ones.
The Random House deal of 300% of retail is pretty straightforward. If this pricing structure were generally adopted, it would cut our output measure by almost five times after adding in the lack of a discount.
We tried to be rational when we boycotted Harper Collins but I for one did not run the numbers. Today that deal, after running the numbers, seems better than more recent ones, such as paying 300% of retail or taking a backlist and leasing it for a year.
Compared to the Random House model the Harper Collins proposal would have a relatively mild affect. In fact when we factor in for less staff needed it might be almost cost neutral. Here are my back of the envelope calculations using 2011 circulation and acquisition numbers: Our average circulation per copy of new fiction books was 14.6. Subtracting this from the allowed 26 circulations leaves 11.4 circs per copy. Our average circulation per copy for older fiction was 1.7 leaving 6.8 average years per copy. Dividing our new fiction budget of $35,000 by 6.8 we get a cost of $19,687 per year. Finally, since we would be paying retail let's just multiply by 1.6 giving us about $32,000. So we would have to almost double our fiction budget to maintain service if this model is generalized. Finally, we would need less staff for processing so a first pass back of the envelope calculation says the HC proposal could allow us to provide the same level of service as we provide now with our current budget.
The Penguin trial currently being worked up at New York Public seems to be less onerous than the Random House one but seriously inferior to Harper Collins. We'd need to see what Penguin is charging for six month old titles to make a calculation but if they are retail, it would not work well for us. The difference in our calculation here is that what is important is not how many times an older book circulates each year but how many older books circulate each year. If we take a conservatively estimate that an average older fiction book circulates once every three years, then we have 23,763 copies divided by 3, multiplied by about $20 per book which gives us about $150,000 per year. This would be over four times worse than the Harper Collins method and thus only a little better than 3 times retail.
Clearly, we need to plan ahead. Right now we are still circulating a lot of paper books and more importantly, pretty much everything is being printed as well as downloaded so patrons do have access. As we move into the future though, we need to do what we can to provide publishers the incentive to give us a deal we can live with. In order for the market to work we need to shun inferior offerings.
As for the legal system option we should explore for leverage. On the wild side how about a change to the copyright law requiring all ebooks to be on file at the Library of Congress and permitting backfiles to be sold to libraries at no greater than retail? Otherwise no copyright.
Richard Naylor is the Director at the William K. Sanford Town Library in Loudonville, NY. He is also the Editor of JLAMS: Journal of the Leadership and Management Section.